China property sales rise in key markets

June 12, 2012|Reuters

* Property buys picking up in Hangzhou, Shenzhen, Nanjing

* Regulators struggle to stifle rumours of mkt loosening

SHANGHAI, June 13 (Reuters) - The number of propertypurchases in some major Chinese cities has picked up, asregulators struggle to combat rumours that Beijing is preparingto loosen curbs on real estate investment to combat slowingeconomic growth.

Property sales in cities including Hangzhou, Shenzhen andNanjing have sped up in recent months, the official ShanghaiSecurities News reported.

Chinese regulators continue to deny suggestions that apolicy loosening is imminent, with the government concerned thatany such move would reinflate the property bubble it has spenttwo years trying to deflate.

The National Development and Reform Commission on Tuesdaysaid that media reports quoting an unnamed NDRC official assaying loosening property policies was a "second card to savethe market" were fabricated.

But media reports that the People's Bank of China had issuednew guidelines permitting commercial banks to offer up to 30percent discounts on loans to first-time home buyers drove upreal estate stocks on Tuesday.

With property prices yet to show signs of recovery, bargainhunting appears have kicked in. A survey released in early Juneby the China Real Estate Index System showed average home pricesin 100 key Chinese cities fell in May.

Property sales volume in Hangzhou, a second-tier city nearShanghai, stood at 13,531 by June 11, already exceeding totaltransactions for last year, the Shanghai Securities Journalreport said.

One 700 unit housing project in the eastern city of Nanjingwas visited by 11,000 prospective buyers, it said.

The report quoted unnamed industry sources who said thatreal estate companies were contemplating changing theirinventory strategies in response to the new trend, slowing therelease of unsold property into the market in anticipation offuture price rises.

Property developer Vanke's chief executiveofficer, Yu Liang, said in a television interview in early Junethat there were about 114 million square metres of unsoldproperty inventory on hand in China's first-tier cities, enoughto last for 11 months at the current pace of sales.